FRANKFURT, Germany — A German law firm is suing embattled auto giant Volkswagen on behalf of a British pension fund, searching for compensation for the plunge in its shares due to the ongoing VW emissions test cheating scandal.
Law firm Nieding + Barth said in a statement that together with another firm, Mueller Seidel Vos, it had filed a suit on behalf of the pension fund at the regional court in Brunswick. The identity of the pension fund was not revealed.
“The basis for our claim is (VW’s) violation of its capital market information obligations,” law firm chief Klaus Nieding said.
“Because VW concealed its manipulation of the software in diesel vehicles for many years, shareholders have suffered substantial losses on their investment,” Daniel Vos of Mueller Seidel Vos said. “And VW must be held responsible for that.”
VW is currently embroiled in a scandal of global proportions after it admitted in September that it had fitted 11 million diesel engines worldwide with devices aimed at cheating emissions tests. It is under investigation in several countries including the United States, where authorities first uncovered the scam and have now filed a lawsuit against VW.
The scandal has hit VW hard. It lost nearly 40% in market capitalization since September, when the scandal broke, even if its shares have come back off their lows since then.
The German law firms accused VW CEO Matthias Mueller of deliberately playing down the affair on his recent visit to the United States.
“That testifies to a lack of will (within VW) to clear up the matter,” Nieding said, who also accused the German authorities of dragging their feet in their investigations.
Nieding + Barth and Mueller Seidel Vos described themselves as the biggest platform for VW shareholders seeking compensation in Germany. They said they currently represented around 6,500 private and institutional investors who were seeking hundreds of millions of euros in damages.
VW is facing a legal onslaught on several fronts. Aside from the lawsuit filed by the U.S. Department of Justice, American vehicle owners are expected to seek billions of dollars in damages.
In related news, New Mexico attorney general Hector Balderas has filed suit against VW, Porsche, Audi and their American subsidiaries for violating air quality and consumer trade laws, seeking a jury trial to determine damages for consumers.
Germany’s financial sector watchdog, Bafin, is also investigating whether VW breached disclosure rules.
Copyright Agence France-Presse, 2016